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US CENTRAL FCU AND WESCORP FCU CONSERVATORSHIP
Over the weekend there was substantial press coverage about two “corporate” credit unions that were taken over by the National Credit Union Administration (NCUA) on Friday, March 20. Here are some points we want you to know:
- These two credit unions (U.S. Central Federal Credit Union, Kansas and WesCorp Federal Credit Union, California) are not regular credit unions like ours that serve consumers. There are a small number (28) of wholesale institutions that do not serve consumers; they provide liquidity, investment and payments services to credit unions like ours. It was two of these “corporate” credit unions that were placed into conservatorship, which means they are still operating normally but are now being managed by NCUA.
- Because of the nature of what they do, these corporate credit unions operate in the capital markets and invest in the highest-rated, investment grade securities. But as with so many others, accounting rules have required them to recognize the decline in the market value of their investments. In the case of these two corporate credit unions, the “unrealized” losses were significant enough that NCUA considered it necessary to install conservatorship.
- What does all this mean for members of our credit union? It’s business as usual. The same level of quality service you receive from our credit union will continue. Our service to you is not affected by these government actions.
- And of course your own funds here are perfectly safe. Your credit union accounts are federally insured up to $250,000 by the National Credit Union Share Insurance Fund and backed by the full faith and credit of the U.S. Government, just as the FDIC does for bank deposits. No credit union member has ever lost a penny of federally insured funds.
- Credit unions have been serving members in the U.S. for 100 years, through good times and bad. We are well positioned to remain strong.
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